Set the right goals in logistics
In logistics, like in any other business, it is very important to have a strategy. However, very often strategic goals are confused with short-term objectives. In fact, it is imperative to set the right goals, especially if the company uses balanced scorecard. As known, balanced scorecard communicates operational and strategic management, or in other words it puts strategy into action. The wrong goals sitting will have a negative impact on the entire process of BSC implementation. The problem is that the wrong goals will require the wrong measures which will make maintenance send implementation of balanced scorecard a total failure. This is not good, especially taking into account that implementation of balanced scorecard requires sufficient monetary and human resource investments.
How timely delivery benefits logistics company
What goals can a logistics company set? Timely delivery of all cargoes and products? Well, this is a good goal. Of moreover, it is quite achievable. But what happens if all cargoes are timely delivered but shipment costs per unit exceed the unit price. What will happen if delivery trucks will be half empty? Within a short period of time a logistics company will turn bankrupt.
As you can see, a certain balance must be observed. On the one hand a logistics company is interested in having satisfied and loyal customers. On the other hand, company management should make sure their logistics business is profitable. Thus, the goal of timely delivery of 100% of cargoes will not work here alone. Setting the wrong goal is like building a house with the poor foundation – of the house will collapse sooner or later.
Find balance between shipping costs and timely delivery
Logistics company should take into account all aspects of delivery in the delivery chain to make the most well balanced offer for the customers. This is where balanced scorecard can help in case the right strategic goals are set. A good example of strategic goal may be “increase of delivery market share by 15%.” Based on this goal the company management will work out a serious of key performance indicators and internal processes necessary for implementation of such a goal.
It is very important that the strategic goal is simple and clear. Increase of market share will require introduction of new offers and services, optimization of internal processes and the work of delivery chain, personal responsibility of truck drivers and logistics specialists, active work with customers etc.
The right goal setting is a precondition for success in BSC implementation, no manner in which business area.
